Finding out that you need to relocate can happen in an instant and upend your life just as quickly. Whether it’s because of a job, a family emergency or a lifestyle change, relocation can wreak havoc on your life and cause you to have to make some very important decisions quicker than you’d like. One of those decisions can be what to do with your house. If you own it and you’re leaving the area for good, chances are that you’ll want to try to sell it quickly. But that’s easier said than done. It’s tough to sell a house on the open market even under ideal conditions, let alone one where you absolutely have to offload the house within a couple of months or even weeks. If you find yourself in this situation, here are 5 options to sell your house if you need to relocate.
The Price is Right
One of the toughest decisions you’ll have to make when deciding your sell your house during a relocation is about the price. You may have lived here for years and put a lot of sweat equity into the place. You might have preferred to sell at a time when the market was more favorable. You might have made home improvements that upped the overall value of the home and call a higher price. And yet, because of your need to sell the house quickly, you might not get the chance to reap the rewards of all those investments or best practices.
The name of the game when selling a house on the open market because of relocation is speed. Unfortunately, speed is the enemy of full value when it comes to your house. You don’t have time to sit around waiting for the right offer and you don’t have the time to go back and forth in negotiations. You need to price the house accordingly so you attract motivated buyers and you need to be okay with what will likely be a lower price than you’d prefer under ideal conditions.
Look around the neighborhood to find out what other homes similar to yours have sold for. Don’t look at list prices, look at sale prices. That will give you a more realistic sense of what your house is worth right now to the market. It’s important to note that many of those home sales happened without the time-crunch you’re under, so you can presume that you’re going to need to be okay with a final price lower than a house similar to yours.
Wait If You Can
If you’re not in a dire financial situation or you expect to come back to the area every so often and aren’t in a rush to sell, you could consider waiting until the timing is more favorable for you. Sometimes, a person relocating will rent in their new location and hold onto their old house until the time is right and then list it on the open market. Or they might list the house but maintain a price level that will likely require more time for the home to sell.
So long as you’re not in a financial strain, this option can ease some of the pressure that comes with a big move like this. It also gives you a bit more time to learn about the place you’re relocating to and which neighborhoods seem ideal for you and your family. Meanwhile, your house is available for sale and you go through the normal process of receiving offers and negotiating for the best one. This can take longer but if you’re okay with paying rent and a mortgage at the same time, you can weather the storm.
One other option that some people will do is send the person who is relocating for work to the new location while the rest of the family remains in the house. It’s certainly not an ideal situation and can cause emotional distress, not to mention add up extra costs for rent and travel, but if it makes sense for you then it’s an option that’s available.
For example, it might be easier to let your children stay in their current house until the school year ends. Or you might want to wait until the weather changes to make a big move. It just comes down to what you can afford and that you understand the extra costs involved.
Rent Your House Out
If you don’t want to rush selling your house but you also can’t afford to keep paying the mortgage on an empty place, you might want to consider renting it out until it’s the right time to sell. You might even find that you’d prefer to rent it out indefinitely in order to generate extra income.
Of course, that means you’re going to become a landlord and that brings with it a whole host of extra issues. You’ll need to make sure you’ve got the appropriate homeowner’s insurance, which can cost more to cover rental properties. You might need to invest in a property management company, especially if you’re not interested in handling day-to-day concerns. And you should be aware that it will have an effect on your taxes, especially given the potential loss of the capital gains tax exemption that you previously enjoyed.
There are potential benefits as well. If you rent your house and then sell it at a loss you can claim the capital loss against your income, which can be a nice tax break. You can also deduct just about any expense related to the maintenance and marketing of the property, including landscaping, repairs, and insurance premiums.
If you do go the landlord route, you’ll want to know how much you should be charging for rent. The rule of thumb is that you should be charging at least one percent of the mortgage amount needed to generate positive cash flow. You’ll also need to determine what rent usually is in your neighborhood and how your property measures up to others.
Don’t forget to factor in the potential for vacancies. Just because you’re renting your place doesn’t automatically mean you’ve got dependable cash coming in every month. The industry standard is to assume your property will be rented for 10 and a half months a year, which means you should assume there will be a window when you’re not generating revenue and only eating costs. If that changes the equation and makes it hard to see how this covers your mortgage payments, you might want to reconsider doing it.
Consider a Short Sale
If you find yourself in a situation where you absolutely have to sell the house in a matter of weeks or days, one option is a short sale. Under this option, your lender agrees to sell your house at a reduced price just to ensure a sale. It’s better for them than you going into foreclosure and turning this into a protracted legal dispute.
One huge caveat is that the lender will often still require that the balance left over after the sale is satisfied and that means you’re still on the hook. Short sales can also really hurt your credit score in certain situations.
Sell Your House As-Is
Another option for the very quick sale is to sell your house as-is to a real estate investor like Jamie Buys Houses. There are a lot of advantages to going this route over a short sale.
First, you don’t need to worry about making upgrades or repairs. You can literally sell the house exactly as it is right now. Second, they will make you a fair cash offer based on the value of the house which has no effect on your credit score. Finally, they can close on the deal in a matter of days or whatever schedule works for you.
Then, once the deal is done, they’ll handle the house and you can move forward with your relocation knowing that the transaction is complete and you don’t have to worry about it anymore.